$100 in 1987 is worth $109 in 1989,
because prices increased 9.2% over that period, an average of
4.48% a year.
$100 in 1987 has
the same buying power as
$109
in 1989
Detailed inflation statistics
Cumulative price change
9.2%
Average inflation rate
4.48% per year
Converted amount ($100 base)
$109
Price difference ($100 base)
$9.15
CPI in 1987
113.6
CPI in 1989
124
Inflation in 1987
3.65%
Inflation in 1989
4.82%
$100 in 1987 → 1989
$109
$100 in 1989 → 1987
$91.61
What happened to prices between 1987 and 1989
Between 1987 and 1989, the Consumer Price Index went from 113.6 to 124.
Cumulatively, prices increased 9.2%, which works out to an average of
4.48% per year. Put differently, a dollar in 1987 bought what
$0.92 buys in 1989: the 1987 dollar
lost 8.4% of its purchasing power over
these 2 years.
1987 tested whether the disinflation of the 1980s could survive its first
real shock. Paul Volcker, who had run the Federal Reserve since 1979 and
driven inflation down from 13.5% to routine mid-single digits, handed the
chairmanship to Alan Greenspan in August. Inflation for the year came in at
3.6%, edging up as the expansion entered its fifth year and a weaker
dollar, following 1985’s Plaza Accord, pushed up the price of imported
goods. Then, on October 19, the stock market delivered Greenspan’s first
crisis: the Dow Jones Industrial Average fell 22.6% in a single session,
still the largest one-day percentage drop in its history, as computer-driven
“portfolio insurance” trading amplified a global sell-off that had started
days earlier. The Fed responded within 24 hours, publicly pledging to
supply whatever liquidity the banking system needed, and the panic did not
spread to the broader economy. Growth continued and unemployment kept
falling through the rest of the year. It was an early demonstration of what
became known as the “Greenspan put,” a Fed willing to move fast and loosen
policy to contain financial shocks even while still watching inflation,
that shaped central banking for the next two decades.
Every 1987 amount converts to 1989 at the same ratio, 1.09: $1,000 becomes
$1,092, and $10,000 becomes $10,915.
Amount in 1987
Value in 1989
$1.00
$1.09
$5.00
$5.46
$10.00
$10.92
$20.00
$21.83
$50.00
$54.58
$100
$109
$500
$546
$1,000
$1,092
$5,000
$5,458
$10,000
$10,915
$100,000
$109,155
$1,000,000
$1,091,549
Inflation by spending category, 1987–1989
Between 1987 and 1989, medical care rose the most, up 14.8%, while energy rose the least, up 6.4%, against 9.2% for all items. The headline number is an average; here is what $100 of 1987
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1987 →
All items (CPI-U)
4.48%
$109
Medical care
7.13%
$115
Food
4.99%
$110
Core (all items less food & energy)
4.47%
$109
Transportation
4.05%
$108
Housing
3.78%
$108
Apparel
3.55%
$107
Energy
3.17%
$106
Not shown because the BLS began these indexes after 1987: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1987
$100 from 1987 had already become $104 by
1988, on its way to $109 in 1989; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 4.8% in 1989, and the smallest rise was 4.1% in 1988.
In 1989, prices rose 4.8% and $100 from 1987 had the buying
power of $109; the year's average CPI of 124 is the level
behind every 1989 figure on this page.
1989 closed out a decade that began in economic crisis and ended in a long,
calmer expansion. Inflation for the year came in at 4.8%, higher than the
mid-decade lull but still roughly a third of the 13.5% peak that had opened
the decade in 1980. The federal minimum wage, unchanged at $3.35 an hour
since January 1981, had gone longer without an increase than at any point
since Congress created it, and had lost close to a third of its purchasing
power to inflation in the meantime; lawmakers would finally raise it to
$3.80 the following April. The decade’s other unfinished business came due
in August, when Congress passed FIRREA, the law that created the Resolution
Trust Corporation to seize and sell off the hundreds of savings and loan
institutions that a decade of deregulation and risky lending had left
insolvent, a bailout that eventually cost taxpayers over $100 billion. On
Wall Street, the recovery was already complete: the Dow Jones Industrial
Average closed 1989 at a record high, just over two years after Black
Monday’s 22.6% single-day crash, capping the bull market that had begun at
the Dow’s 776 low in August 1982. Between the S&L bailout, a wage floor
eroded by years without a raise, and a stock market at new highs, 1989
captured how unevenly the decade’s disinflation had been felt.
MLA: “Inflation from 1987 to 1989: $100 is worth $109 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1987-to-1989/
APA: InflationCalculator.com. Inflation from 1987 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1987-to-1989/